Brazilian Miner Vale Plans Exit from Steel JVs, to focus on boosting Nickel Output

Brazil's Vale SA plans to exit from its steel joint ventures in the country but aims to focus more on its mining business with ramp up of nickel output ahead of rising demand for electric batteries, the company revealed in an investor presentation this week.

Vale has majority stakes in CSP (Companhia Siderurgica do Pecema) slab plant in northeast Brazil, and the Acos Laminados do Para (ALPA) steel project in northern Brazil and the company has planned exit from both the units. South Korea's POSCO owns 20% in CSP and Dongkuk Steel Mill Co. holds 30%.

Vale in 2016 had already sold its minority stake in Companhia Siderurgica do Atlantico in Rio de Janeiro state to ThyssenKrupp, which sold the plant to Ternium. Vale said it may develop metallics production in Brazil.

On the other hand, the company aims to boost production of nickel by about 70% in coming years to 360,000 tonnes a year, mainly by expanding in Indonesia. The nickel market is poised for dramatic change amid export ban on the metal by Indonesia starting from Jan'2020. The metal is currently mainly used as an alloy to make stainless steel, but it is a key component in electric vehicle batteries.

Vale has two nickel projects on the drawing board in Indonesia being developed with joint venture partners. The Bahodopi project is due to produce 70,000 tonnes a year of ferronickel and is being developed with Chinese partners. Vale is also working with Japan's Sumitomo Metal Mining Co Ltd in Pomalaa for a processing plant aiming for 40,000 tonnes a year of nickel output suitable for batteries. Vale also aims to increase copper output to 480,000 tonnes by 2023, up 20% from an estimated 400,000 tonnes next year.